Today, the FTSE 350 index of large- and mid-cap shares still trades at a 30-year discount to the S&P 500 index of US stocks.

So which UK companies have grabbed my attention? Three in particular stand out to me. These are:

• Grainger (LSE:GRI)
• Rathbones Group (LSE:RAT)
• Hollywood Bowl (LSE:BOWL)

Here’s why I think they’re top value shares to consider.

A cut-price REIT

With a price-to-earnings (P/E) ratio of 9.4 times, Grainger’s cheap share price doesn’t reflect the stability of the residential rentals market, in my view, nor the long-term earnings opportunity it enjoys.

It’s true that rising inflation has raised the risks the FTSE 250 company faces. If interest rates rise, its cost of borrowing could rise sharply. But I’m still expecting earnings to rise as the UK’s chronic housing shortage drives rental growth.

Grainger’s like-for-like rents rose 3.1% during October-March. Occupancy also remained high at 96%, underlining the durable nature of the rentals market.

One final thing: Grainger’s dividend yield has shot up to an impressive 5.3%. Under real estate investment trust (REIT) rules, the firm must pay 90% of its rental profits out to shareholders.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Growth and dividends

Rathbones shares also look dirt-cheap based on expected earnings and dividends. Its P/E-to-growth (PEG) ratio comes in at just 0.4. A reminder that any sub-1 figure suggests a stock that’s trading below value.

Meanwhile, the asset manager’s dividend yield is 5.4%. Like Grainger, that’s roughly 2% better than the FTSE 250 average.

So what else makes Rathbones a top bargain to consider? Rising competition in the financial services space is a clear risk. But the company’s excellent reputation means it is (at least for now) continuing to thrive in what remains a fast-growing sector.

Rathbones notes that “a projected £5.5trn in intergenerational wealth transfer over the next 25 years, combined with an ageing population and rising financial complexity, continues to drive long-term demand for professional advice“. Its 2024 acquisition of Investec Wealth & Investment gives it added scope to seize this opportunity.

Bowled over?

Hollywood Bowl’s shares surged after late May’s latest trading update (more on this later). But the 10-pin bowling operator still looks cheap based on predicted earnings, with a PEG ratio of just 0.9.

Like many other UK leisure shares, its revenues are highly sensitive to the the broader economic landscape. Things could become more challenging as inflation rises. But trading remains rock-solid so far, with sales and adjusted pre-tax profit up 9.5% and 8.1% during October-March.

The question is, can it keep up the pace? I’m confident it can, supported by rapid expansion in Canada, along with investment in areas like amusements to encourage bowlers to spend more.

One last big perk for value chasers: Hollywood Bowl’s dividend yield is a tasty 4.7%.

Should you invest £5,000 in Hollywood Bowl Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Hollywood Bowl Group Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post How are these FTSE 250 growth and dividend stocks so cheap? appeared first on The Twelfth Magpie.

Time for a strike

I’m talking about the Hollywood Bowl Group (LSE:BOWL). The business is the UK’s largest ten-pin bowling operator and the world’s second-largest, managing more than 90 entertainment centres across the UK and Canada. From the current price of 307p, the group of nine analysts currently offering forecasts have an average target price of 388p. This represents just over a 26% move higher from the current price. Interestingly, the team at Investec has the highest target at 450p.

Part of the optimism in the forecasts likely stems from recent performance. For example, last week the company released its latest half-year results. Revenue climbed 9.5% to a record £141.5m, while adjusted profit before tax rose 8.1% to £32.1m. As well as lifting the dividend, the management team announced a new £5m share buyback programme. This is usually taken well by investors, as it signals confidence in both the balance sheet and future cash generation.

Looking ahead

I believe there are several reasons why the experts could be correct. First, the company still has a significant runway for expansion. Management has outlined plans for additional centres across the UK. New sites have reportedly been performing ahead of expectations, which could support another round of earnings upgrades if that trend continues.

Second, even though some might see the operating model as old-fashioned, it’s actually very appealing during uncertain economic periods. When you think about it, the business generates strong cash flow, carries a net cash position, pays dividends, and operates in a segment where consumers often trade down into lower-cost leisure options rather than abandoning entertainment altogether. That combination of growth and defensive qualities is relatively rare in the UK market and could therefore help the share price remain in demand.

Third, I think the stock has room to run as it’s not flashing as overvalued. It has a price-to-earnings ratio of 14.13, which is above the FTSE 250 average of 10.6 but isn’t high for a growth stock.

Managing expectations

Of course, there are risks. Labour costs remain a challenge, with management openly discussing pressure from higher wages and employment taxes. We also shouldn’t forget that analyst forecasts are still subjective opinions. There’s nothing to say that the 26% target will be hit over the coming year.

Yet even with these factors, I believe the stock could be primed to keep moving higher. Therefore, it’s one I’m seriously thinking about buying and believe investors could consider doing the same.

Should you invest £5,000 in Hollywood Bowl Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Hollywood Bowl Group Plc made the list?

Jon Smith has no positions in the shares mentioned.

The post Analysts think this growth share could rally a further 26% in the next year appeared first on The Twelfth Magpie.

Let’s take a look at what caused this massive jump…

A resilient business during difficult times

Logging into a data provider, you might have assumed that some sort of offer had come in for the UK and Canada’s leading ten-pin bowling operator. After all, the stock was down 28% in 12 months before today, and looked decent value.

At least that’s what I thought, as I’ve been banging on about this stock in recent weeks. But it wasn’t a takeover bid. Instead, the company released an encouraging interim report covering the six months to the end of March.

The headline numbers looked decent:

• Revenue was up 9.5% to £141.5m
• Adjusted pre-tax profit increased 8.1% to £32.1m
• Adjusted earnings per share (EPS) rose 11.3% to 14.5p
• Interim dividend hiked 10.2% to 4.52p

Like-for-like (LFL) sales growth was more modest at 2.3%, but management said Canada’s performance was hit by “unseasonably heavy snowfall in certain key periods”. LFL sales growth was 2.6% in the UK, which isn’t too shabby considering the relentless pressure on household budgets. 

The good news is that spend per game rose significantly across both major territories (+7.6% in the UK and +9.7% in Canada). This was boosted by modest price increases, optimising peak pricing, add-on sales like VIP lanes, and a “strong amusements mix”. 

During the period, Hollywood Bowl refurbished a centre in Norwich and opened a new one in Edmonton, Canada. This brought the total to 93. But it’s still on course to have 130 centres open by 2035, including 35 in Canada by 2032 (bringing forward the original planned total there by three years).

Against a challenging backdrop, the resilience of our business model, and ongoing appeal of our value offer for customers is clear.
CEO Stephen Burns

Why is the stock surging?

Of course, the ongoing cost-of-living crisis is a key risk moving forward. With food inflation possibly hitting double digits by Christmas, and energy bills set to rise yet again, it’s just a brutal time for the leisure sector in general. Second-half growth could slow.

Given this challenging backdrop, I was quite surprised to see the share price surge so high. Seemingly some investors had been expecting far worse news during the half (perhaps falling LFL growth and stagnant spend per game).

Meanwhile, costs are being kept under control, profits are growing, and a £5m share buyback programme was announced for H2. A 10% dividend hike also signals confidence in the outlook.

My takeaway

My view is that Hollywood Bowl is well equipped to carry on performing over the medium term. It has a solid balance sheet, prime locations, strong supplier relationships, and a clear growth strategy.

Meanwhile, a family of four can bowl for £26 in the UK, which is more affordable than many rival activities (zoos, theme parks, football matches, etc). So there’s a strong value proposition.

After today’s rise, the stock is trading at around 13 times forward earnings while still offering a well-covered 5% dividend yield. Taking a long-term view, I reckon Hollywood Bowl is worth considering, especially on dips.

Should you invest £5,000 in Hollywood Bowl Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Hollywood Bowl Group Plc made the list?

Ben McPoland has no position in any of the companies mentioned.

The post Up 16.5%! Here’s why Hollywood Bowl stock smashed the FTSE 250 today appeared first on The Twelfth Magpie.

However, building a sizeable passive income stream is likely going to take time and patience, as well as a grasp of investing basics. The good news is that this goal is entirely possible.

Let’s take each one of those things in turn — time, patience, and investing basics.

How long to get to £37k?

Let’s assume someone has £10k in a Stocks and Shares ISA, and that they can afford to invest a further £250 a month.  

Let’s make another assumption: this person manages a long-term average annual return of 8.5% (with dividends reinvested), which is roughly in line with the UK market average over the past decade.

Here’s how this person’s portfolio could grow over time (excluding platform fees and stock stamp duty):

• 10 years: £70,361 
• 20 years: £211,162 
• 30 years: £539,601

But we now require a third assumption (last one, I promise!). That’s a portfolio dividend yield of 7%. 

Admittedly, this is well above the market average of about 3.2%. But there are a few UK stocks that yield 7%+, while some holdings would ideally raise their dividends over time, resulting in a higher portfolio yield (though this isn’t nailed on). 

The end result is that a 7%-yielding ISA worth £538k would throw off roughly £37,700 in tax-free dividends. And that could be the point to finally start enjoying passive income.  

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Patience

Of course, this scenario would require someone to patiently reinvest dividends for three decades. Not everyone has the temperament to do that.

Being patient would also mean enduring the inevitable ups and downs of the stock market. This can be frustrating, especially when your portfolio is a sea of red day after day during meltdowns.

From my experience, resilience is a necessary trait.

Investing 101

Learning the basics is also necessary for stock-picking. These include things like valuation considerations, assessing the balance sheet, and working out a company’s competitive advantage (or ‘moat’).

Take Hollywood Bowl (LSE:BOWL), for example. Does it have a durable moat? I think so, as this is the largest ten-pin bowling operator in the UK. Therefore, it has a market-leading position and a strong brand.

What’s more, bowling alleys require massive, open-plan floor spaces. Not many firms have the capital for this, while Hollywood Bowl’s scale and reliability as a long-term tenant gets it prime locations like retail parks.

What’s the balance sheet like? At the end of March, the FTSE 250 company had a net cash position of £26m, alongside an undrawn £25m revolving credit facility.

This robust balance sheet will support plans to have 130 bowling centres operating in the UK and Canada by 2035 (up from 93 today).

Finally, the stock is trading at just 10.5 times forward earnings, so it appears to offer great value. However, this cheapness is due to the stock falling 29% in a year due to inflation fears.

This could be the fly in the ointment moving forward, especially if more people start tightening belts.

On balance though, I think Hollywood Bowl is worth considering, especially while it’s offering a generous 5.5% dividend yield.

The post £10,000 in an ISA? Here’s how that could grow to £37,700 of passive income appeared first on The Twelfth Magpie.

Take Hollywood Bowl (LSE:BOWL) as an excellent example. As I write, it currently costs 253p to buy one share. However, seven brokers have an average one-year price target of 395p.

In other words, there’s a 56% difference. And were this forecast to come to fruition, it could turn a £7,500 investment into £11,700 by mid-2027, with dividends on top.

Admittedly, that sounds too good to be true. What’s the catch?

A tough backdrop

Hollywood Bowl is the largest ten-pin bowling operator in the UK and Canada. Speaking personally, I think it’s a cracking family day out, as kids love it and dads like me can order an ice-cold beer directly to the lane. The centres serve hot food and also have arcades.

The catch is that the UK economy is in a fragile state at the moment, with a potential recession looming. Hopefully this doesn’t happen, as more people tend to lose their jobs during downturns. And this wouldn’t be a great backdrop for Hollywood Bowl.

Reflecting this situation, the share price has fallen roughly 27% in the past two years.

Resilient financial performance

Despite the ongoing inflationary pressures on consumers, the company is actually showing admirable resilience, in my opinion. During the six months to 31 March, group revenue rose 9.5% to £141.5m, with like-for-like growth of 1.9%.

• UK revenue increased 9.4% to £118.4m
• Canada revenue was up 12.8% at constant currency to CAD 42.9m (£23.2m)

As we can see, the UK still makes up the lion’s share of sales. However, Hollywood Bowl is applying its successful expansion blueprint to Canada, where it sees a lot of potential to consolidate the fragmented ten-pin bowling market there.

Two new UK centres and one in Canada are due to open in the current second-half period. The firm, which boasts robust margins, is targeting 130 centres by 2035, up from 93 today.

At the end of March, the firm had a net cash position of £26m, indicating there are no balance sheet issues. Reassuringly, management says 76% of the group’s total electricity needs are hedged until September 2029.

In April, CEO Stephen Burns commented: “Demand for high-quality, family leisure activities that offer great value for money also remains resilient in both territories, and our cash generative business model allows us to invest where we see opportunities and deliver profitable growth.”

Solid value

All in all, Hollywood Bowl appears very well-insulated against any potential weakening of the economy. And right now, I think the stock looks very interesting from a valuation perspective.

Because based on current forecasts, the forward price-to-earnings ratio is just 10.5. And there’s also a market-beating 5.4% dividend yield on offer.

Finally, it’s worth noting that all eight City brokers covering the stock in the past three months rate it as the equivalent of a Strong Buy.

Of course, it goes without saying that these forecasts could prove wrong if inflation hammers the UK economy and consumer spending.

But for investors taking a five-year view, I reckon this cheap FTSE 250 dividend stock deserves a closer look.

The post This FTSE 250 stock could turn £7,500 into £11,700, according to brokers appeared first on The Twelfth Magpie.

Here, I want to look at how realistic it would be for someone to aim (over time) for the equivalent of £100 a day in passive income from dividend stocks.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Caveats

The first thing to mention is that companies don’t pay dividends weekly, let alone daily. Most do so either quarterly or bi-annually. So when I say £100 a day in passive income, I’m talking about the equivalent of that spread across a year.

Furthermore, individual dividends are never guaranteed. Even the most seemingly reliable payers — such as Tesco and FTSE 100 banks — have cancelled their distributions at one time or another.

Therefore, it’s essential to build a diversified income portfolio. This way, it would still pay out income even if one or two of the shares in the portfolio disappoint.

It certainly helps one to sleep better at night knowing a portfolio is well diversified (especially one large enough to generate £36,500 a year).

Avoiding traps

With these caveats out of the way, how long would it take to build this level of income? Well, that would depend on the dividend yield.

For example, an ISA with a 3.5% yield would need to be worth a stonking £1.04m. Whereas one yielding 6% would ‘only’ need to be valued at roughly £608,000.

Now, this immediately creates a danger because novice investors might be tempted to invest in ultra-high-yield stocks, for example, those yielding 10%+. But these are often what’s called a ‘yield trap’.

In other words, there’s usually a good reason why the yield is so high. Usually, the stock has fallen a lot because the market is pricing in some forthcoming financial problems, and therefore a potential dividend cut.

All that glitters is not gold!

It’s possible

While income is tax-free inside an ISA, the annual contribution limit is £20,000. Therefore, it will naturally take time to build up to a substantial portfolio value.

However, it’s possible given enough time. For instance, investing £720 a month would grow to around £608k in 23 years, assuming an average annual return of 8.5% with dividends reinvested.

This is the stock market’s ballpark return long term, so isn’t some daft unrealistic target.

5%-yielding stock

One stock that I think is worth assessing is Hollywood Bowl (LSE:BOWL). Listed in the FTSE 250, this is the UK and Canada’s largest ten-pin bowling operator.

There are a number of reasons I like this stock:

• A leading market-position
• International expansion opportunity beyond Canada
• Consistent profitability (proven business model)
• Well-run management team
• Strong balance sheet
• Range of offerings, including food and drink, amusement arcades, and mini-golf

Moreover, the valuation looks cheap to me today, with the stock trading at just 11 times next year’s forecast earnings. There’s also a forward dividend yield of 5.1% — well above the FTSE 250 average.

The main near-term risk I see relates to rising inflation, which could heap more pressure on consumers.

But over the long run, I expect the factors listed above to come to the fore, leaving Hollywood Bowl in a strong position to deliver attractive long-term returns.

The post How much do you need in an ISA for £100 a day in passive income? appeared first on The Twelfth Magpie.

Here are three UK growth shares to check out in April.

Moonpig

Moonpig (LSE:MOON) is the UK and Netherlands’ leading online greeting card firm, with over 12m active customers.

I’m one of these customers, and I use it all the time to send personalised cards. And I’m not alone because Moonpig enjoys tremndous loyalty, with roughly 91% of revenue coming from existing customers.

Looking ahead, this should create a solid base for continued expansion. For fiscal year 2026, ending 30 April, the firm expects adjusted earnings per share growth to be as much as 12%.

The stock’s trading at 11.5 times forward earnings, which is attractive considering the board just announced a new £65m share buyback programme for FY27. There’s also a near-2% forward dividend yield, which could grow nicely over time (no guarantees, of course).

One potential risk I see is further pressure on consumer budgets (sadly, a common theme today). However, UK online card penetration is still only 6% by value, suggesting there’s a strong secular growth story unfolding here.

Hollywood Bowl

Next, we have Hollywood Bowl (LSE:BOWL), the UK’s largest ten-pin bowling operator. The stock’s also trading at around 11.5 times forward earnings, but offering a much larger 5.1% forecast yield.

Beyond the income potential, I like the company’s growth prospects. By 2035, it expects to have 130 centres, up from 93 today. And a growing number are expected to be in Canada, where it’s successfully applying its UK expansion playbook.

Again, consumer spending pressure is the biggest risk, exacerbated by rising inflation. But in the six months to 31 March, revenue rose 9.5% to £141.5m, with 2.6% like-for-like sales growth in the UK.

Therefore, the company’s showing resilience in a tough market. It makes me wonder how well this business could do in future if and when the cost-of-living crisis eases.

Genus

The third stock is animal genetics specialist Genus (LSE:GNS). The stock’s up 62% in one year but down 50% over five.

Now, this one isn’t conventionally cheap because it’s trading at 25 forward earnings. However, the long-term growth could be substantial due to the company’s PRRS-resistant pig programme (PRP).

What on earth is that? Well, PRRS (porcine reproductive and respiratory syndrome) is a devastating viral disease that causes reproductive failure in sows and respiratory illness in piglets. It has long been the bane of the global swine industry (losing around $1.2bn per year in the US alone). 

Genus has used gene-editing (CRISPR) technology to produce PRRS-resistant pigs. Canada has approved use of the PRP gene edit, while Genus is making progress with other key international regulators, including China, Mexico, and Japan.

Of course, the big risk here is Chinese or US regulators rejecting these gene-edited pigs. But brokers are getting excited about the potential for high-margin royalties from this programme.

For example, house broker Panmure Liberum recently told clients: “We remain of the view that Genus is a multi-year growth story and that it stands a reasonable chance of being a FTSE 100 stock by 2030.”

That’s an exciting prospect, considering Genus’ current £1.7bn market cap.

The post 3 top FTSE 250 growth stocks to consider for an ISA today appeared first on The Twelfth Magpie.

Even so, this still leaves Hollywood Bowl some way lower than a high of 350p reached back in May 2024. Is the stock worth considering right now?

Decent H1

The reason for the share’s jump today was a solid trading update from the UK’s and Canada’s largest ten-pin bowling centre operator.

In the six months to 31 March, revenue grew 9.5% to £141.5m, with 1.9% like-for-like (LFL) growth. Encouragingly, the UK saw 2.6% LFL growth, showing how Hollywood Bowl is doing well despite the tough consumer backdrop.

During the period, it opened a new prime location in Edmonton, Canada, where it says trading has started well. This brought the estate to 93, with 77 locations in the UK and 16 in Canada. And a further three, including two in the UK, are due to open in the second half.

CEO Stephen Burns said: “Demand for high-quality, family leisure activities that offer great value for money also remains resilient in both territories, and our cash generative business model allows us to invest where we see opportunities and deliver profitable growth.”

Resilience

Of course, the biggest risk here is the potential for even more pressure on consumer spending due to the Middle East conflict. High government debt and a reliance on energy imports has left the UK economy more vulnerable than most, according to the IMF.

However, one thing I like about Hollywood Bowl is the balance sheet. It ended March with a net cash position of £26m, and no bank debt. This puts it in a strong position, even if the UK economy enters a downturn as energy costs soar.

Additionally, 76% of the company’s total electricity needs are hedged until September 2029, including 12% provided from on-site solar energy. And the firm says its high gross margin makes it “well-insulated against inflationary pressures“.

Bowling should remain popular

We’ll learn about profits and the dividend when the interim results are published on 27 May. But forecasts put the forward dividend yield at around 5%, a fair way above the FTSE 250 average.

The stock is pretty cheap as well, trading at 11.5 times forward earnings. I don’t consider that expensive for a market-leading company with a strong balance sheet that’s still growing in a difficult consumer environment.

On top of its core bowling and amusement arcade offerings, the company has been testing mini-golf, e-darts and go-karting in some locations. And average spend per visit has been trending up, with people buying more food and drink as they enjoy a bowl.

Finally, after seeing success in Canada, the firm is actively evaluating other international opportunities. I see no reason why the format couldn’t work in multiple countries, given that fun family activities like this are pretty universal. Hollywood Bowl is already targeting 130 centres by 2035.

Weighing things up, I reckon there’s a lot to like about this well-run company. The sensible valuation, 5% dividend yield, and long-term overseas growth potential make it a UK stock worth considering.

The post Up 12% in a month, Hollywood Bowl is a UK dividend stock on a roll appeared first on The Twelfth Magpie.

For most, however, it might appear little more than a daydream. After all, it equates to £52k a year. Most people don’t have that much to invest, let alone possess a portfolio big enough to generate it in passive income.

So, how realistic is it?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The long game

How big an ISA would have to be to throw off £52k a year would come down to the size of the dividend yield.

For example, a portfolio with a 6% yield would need to be worth approximately £867,000. Not only is that a hefty sum, it also far exceeds the annual £20,000 Stocks and Shares ISA contribution limit.

Therefore, even if one had £867k to invest upfront, only a fraction of that could be invested tax-free straight away. By necessity then, most investors are compelled to play the long game.

But the good news is that there are some benefits to doing this. The main one is that it becomes impossible to mistime the market. For example, if someone is investing £700 per month come rain or shine, they will be buying when the market is up, down and flat.

Crucially, they will be investing when stocks are down and dividend yields are higher. History shows the very best time to invest is after a stock market crash.

In contrast, a person who invests a large sum may do so just before the stock market tanks. And if they’re new to investing, they may make beginner mistakes that a longer-term investor would learn to avoid.

How long?

Sticking with the example of investing £700 a month, it would take just over 25 years to reach £867,000. This assumes an average total return of 9.5%, with dividends reinvested.

This return isn’t guranteed, of course, and individual dividends are far from bullet-proof. But it is the annualised total return of the FTSE 100 index over the past decade, so it’s not an unrealistic ballpark figure to aim for.

Finally, it goes without saying that £52k will buy less in 25 years than it does today. Then again, rising inflation arguably makes a future income stream even more necessary.

FTSE 250 dividend stock

One example of a dividend stock to consider for an ISA is Hollywood Bowl (LSE:BOWL). As the largest ten-pin bowling operator in the UK and Canada, it has a strong brand and plenty of repeat business.

Last year, revenue increased 8.8% to £251m, while average spend per game rose to £12.04 from £11.05 the year before. The FTSE 250 firm opened 7 new locations, bringing the total to 92. It intends to have 130 centres by 2035, including strong expansion in Canada.

Naturally, inflation adds risk. If people’s energy, fuel and food bills go up, they may have less disposable income for a game of bowling.

That said, the experience is competitively priced. A family of four can sometimes bowl for under £26 during peak times, and Hollywood Bowl is expanding its electric go-karting and mini-golf offerings. 

After falling 26% in two years, the stock’s trading cheaply at 10.6 times forward earnings. And there’s a forward dividend yield of 5.5% on offer.

The post How much do you need in an ISA for £1,000 a week in passive income? appeared first on The Twelfth Magpie.

One name that will be familiar to many readers is Hollywood Bowl (LSE:BOWL). As the UK’s number one tenpin bowling operator, it’s a popular choice for fun family days out.

Let’s take a look at why I think this FTSE 250 stock could be worth considering as part of a diversified income portfolio.

Still expanding

As well as operating 77 centres across the UK, Hollywood Bowl now has 15 locations in Canada under the Splitsville brand. They’re typically located in prime, out-of-town leisure and retail parks where there’s high footfall and free parking.

In FY25, which ended in September, revenue increased 8.8% to £250.7m, with statutory post-tax profit up 15.7% to £34.6m. The firm opened a record five new sites in the UK and two in Canada, with 12 refurbishments.

Spend per game rose 9.8%, including 14.8% in Canada. This shows that Hollywood Bowl is successfully replicating the UK business model in North America, including offering food and drinks, as well as other activities like e-darts, mini-golf, pool tables and go-karting in select locations. Amusements grew 15.1%, boosted by cashless options.

Management said it’s introducing the ability to wear your own footwear while playing in Canada. I seem to remember those rented bowling shoes were never the comfiest (and certainly not cool), so this might attract more people, including younger groups on dates.

The company continues to buy back shares, which should boost the earnings per share (EPS) metric over time, and finished September with a net cash balance of £15.2m.

We delivered a fourth consecutive year of record revenue and adjusted EBITDA, against a backdrop of industry-wide challenges...This performance demonstrates the resilience of our model and the enduring appeal of bowling for consumers.
CEO Stephen Burns.

Tough backdrop

Last year, Hollywood Bowl paid a dividend of 13.3p per share. City analysts expect the payout to edge up 6% next year to 14p, giving a 12-month forecast dividend yield of 5.2%.

This means anyone investing £5,000 in shares could expect approximately £260 in annual passive income. For context, the average FTSE 250 stock yields roughly 3.2%.

Of course, the dividend forecast might not be met, especially if trading conditions worsen between now and then. Like-for-likes sales growth has been quite modest (up just 1.1% last year).

And while Hollywood Bowl offers good value for money, enabling a family of four to go bowling for just £26 at peak times, falling inflation and interest rates could also make competition like theme parks and zoos more affordable.

The future looks bright

Looking ahead, I’m optimistic Hollywood Bowl can grow into a larger company. And I see no reason why it couldn’t expand to further overseas markets in future, including in Europe. After all, affordable family days out doing fun activities should be popular wherever.

It has a pipeline of four new centres this year, with ambitious plans for 130 locations by 2035. Of these, 35 will be in Canada, which already accounts for 15% of group revenues.

The stock is down 25% since May 2024, leaving it on a cheap-looking forward earnings multiple of 11.3.

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